European Business: We are all being told to reduce the amount of sugar in our diets. To what extent is this bad news for a baker of cakes?
Oliver Lahode: Sugar is, of course, a key ingredient in all of our products and we have had extensive discussions about the possibility of reducing the level of sugar in our products. So far, we have reduced sugar content by 10% without a noticeable effect on flavour and texture, and are gradually working our way to a reduction of around 30%. However, any further reductions will not be accepted by consumers. Sugar is not just there as a sweetener, it is a vital part of the alchemy that happens when cake batter is baked. Too little and the look, feel and taste of the item are noticeably lacking.
European Business: Despite concerns over diet, consumer appetite for sweet treats continues to grow. How much do you produce each year to satisfy the collective sweet tooth of consumers?
Oliver Lahode: Our product range contains a balance of items that are popular all year round on the one hand and seasonal items on the other. The period leading up to Christmas is our busiest time. We take on temporary workers to bring our workforce up to a 1,000 in the run up to the Christmas sales period. We are particularly well known for our range of Christmas stollen. Stollen is a traditional fruit cake filled with marzipan. We currently offer different versions ranging from traditional recipes to modern twists on the classic. We are the market leading producer of Christmas stollen worldwide and have helped popularize this German tradition around the world. In Europe, we are the market leader for sponge flan bases and in Germany we lead the ready-made pound cake market with a range that includes classic cake flavours such as lemon, chocolate and marble cake. We also make various small treats such as mini cakes and muffins, filled soft rolls and croissants. Elsewhere in our range, we have the long-established Koala brand of filled biscuits. The koala-shaped biscuits are filled with chocolate or milk cream and include a collectible surprise in each box. Finally, we still make the cigar-shaped wafers for which we first became known. Total annual production amounts to 100,000 t of baked goods.
European Business: How has your production structure evolved to enable the manufacture of such a wide range of products and deliver such a high volume of goods?
Oliver Lahode: The company started out as a small artisan bakery in the north German town of Soest in 1884. The premises were destroyed in both wars but always rebuilt. In the 1960s, the company began to produce baked goods on an industrial scale and a large production facility was built in 1971 to meet growing demand. By the mid-1970s, under the management of Günter Trockels, the company had started supplying customers in neighbouring European countries. In 1995, he handed over the reins of the company to his three sons and expansion really took off. Today, Kuchenmeister produces at four sites in northern Germany. Most recently, we built a new state-of-the-art logistics center here in Soest to fulfil orders throughout Europe. Qualified and experienced lorry drivers are hard to find so we do everything we can to make their lives easier. We even have accommodation on site for drivers.
European Business: How has your approach to sustainability evolved over time?
Oliver Lahode: Sustainability is a huge topic for Kuchenmeister. For us it is important to maintain a dialogue with customers and to respond to their concerns. We have introduced several proprietary innovations in our production plants to reduce energy and water consumption. We have also started the first trials with electric trucks as the next step on from the LPG trucks we currently use.
European Business: Consumers today are not just concerned about sugar but also about additives. How does Kuchenmeister respond to this in its recipes?
Oliver Lahode: Kuchenmeister has always prioritized the use of whole ingredients in its products, even when other industrial manufacturers have taken a different route. For example, when we switched to automatic wafer production in the 1960s, we resisted the temptation to use water instead of milk to cut costs like our competitors and remained faithful to our traditional recipe and superior flavour. We have always sought to keep our recipes as natural as possible and always question the need for additives. We have a clean labelling policy. Our cost advantages come not from skimping on ingredients but in the use of advanced automation in our production process.
European Business: What are Kuchenmeister’s plans for the future?
Oliver Lahode: As a hidden champion, we want to maintain our advantage over our competitors. The two business areas of own brand and private label production complement each other well. For the future, we will also certainly be focusing more on our Koala brand.